REG - Trifast PLC - Trading Update and Directorate Change

TrifastAnnouncement

20/02/2023 07:00

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RNS Number : 3653Q  Trifast PLC  20 February 2023

 

 

 

 

Trading Update and Directorate Change

 

 

London, Monday, 20 February 2023: Trifast (LSE: Main Market symbol: TRI)
provides the following update on the trading performance for the financial
year ending 31 March 2023 ("FY23") and notification of a Directorate change.

Trading update

Since the half year results in November 2022, the Group has recorded further
year on year revenue growth, led by the European and North American
businesses.  In addition, Trifast has secured a further £10m of new contract
wins since 30 September 2022, increasing the year-to-date total to £22m.
During January, we also concluded negotiations with significant customers
resulting in contractual pricing uplifts which were in line with our
expectations. However, we have continued to see macro-economic conditions
contribute to some volatility in demand patterns, and in particular have, more
recently, been impacted by significant destocking from one of our Asian
manufacturing customers.

As set out in November, part of the Board's focus for the second half was to
drive an improvement in the Group's operating margin through a combination of
the pricing, and cost saving actions.  Whilst progress has been made in both
areas, the benefits to operating profit (before the negative impact of FX),
have been more than offset by the effects of the destocking in Asia.

Gross inventory levels at CER (£103.6m) have reduced during the second half,
and we remain on track for the targeted reduction by 31 March 2023.
Consequently, whilst net debt is reducing, it currently stands at an elevated
level of around £44m.  This is within both facility headroom and covenant
levels but is likely to result in the Group incurring higher net interest
charges for the year than previously expected.

 

As a consequence, the Group will be significantly below current market
expectations for the year ending 31 March 2023*.  For FY2023, the Company is
expected to report, revenue of c.£243m and adjusted PBT of c.£9.0m.

 

Strategy update

As set out above, the Board has been focused on taking steps to improve the
performance of the Group through a mix of price increases, cost efficiencies
and working capital (primarily inventory) improvements.  In Q4 2022, a
strategic review of operations and functions was initiated to identify
specific measures that could support profitability without adversely impacting
our growth momentum or customer service levels.  The initial output of this
review shows expected savings during FY24 rising to an annualised saving of
c.£5m.

 

Directorate change

Mark Belton, CEO resigned on 18 February 2023 and stepped down from the Board,
leaving the Company with immediate effect.  Mark has been with the Group for
23 years and was appointed to the Board in 2010 as Group Finance Director,
before taking up the CEO role in 2015. We would like to thank Mark for his
tireless commitment to the business and wish him and his family well for the
future.

 

With immediate effect, Scott Mac Meekin will relinquish his NED
responsibilities and will assume the role of Interim Chief Executive Officer.

 

Scott, a Singapore national, has a successful career spanning over 30 years in
both commercial and corporate environments from an investment, buy & build
and restructuring perspective.  Working internationally, Scott has extensive
experience in the fastener industry, manufacturing and industrial supply
solutions.  This will be invaluable in supporting with the immediate business
challenges as well as bringing the necessary leadership to the team.

 

Commenting on the change, Jonathan Shearman, Non-Executive Chair said:

 

"Mark has played an important role over the last 13 years as a Board member
and before that as a dedicated member of the Trifast team.  I would both
personally and on behalf of the Board, want to express my gratitude for the
loyalty and dedication to the Company and wish him well with his future plans.

 

"As a Board, we are fortunate to have the experience and industry knowledge
that Scott can afford Trifast.  His support will ensure the right balance
between business continuity and change, alongside the necessary development of
the Group."

 

The Board will keep shareholders updated on the process to appoint a permanent
CEO in due course.

 

Outlook

Whilst the short-term shortfall in the Group's performance is disappointing,
given ongoing contract wins, pricing increases and the roll out of key
initiatives, the Board continues to believe in the medium-term potential of
the Group and continuing to update shareholders on progress.

 

The next scheduled Trading update is expected in late April ahead of FY2023
Annual results scheduled for release in July 2023.

 

 

Note:

*Company compiled consensus FY23, prior to this announcement and based on five
analysts was:

 Revenue   £242m
 Adj. PBT  £14.3m
 EPS       8.1p

 

 

Disclosures for Scott Mac Meekin

 

 Scott Mac Meekin (age 65)
 Current appointments       Former appointments within the last 5 years
 Interim CEO Trifast plc    Trifast plc (NED) 2013-2023
                            CEO, Dearman Engine Company
                            CEO Circular Computing and A2C Services
                            Portfolio Director, Navis Capital Partners, Singapore
                            COO, Tes-Envirocorp (Navis owned)

 

Except for those contained in this announcement, there are no other details
that require disclosure in respect of Scott Mac Meekin's appointment pursuant
to Rule 9.6.13 of the UK Listing Rules.

 

 

 Further enquiries please contact:
 Trifast plc
 Jonathan Shearman, Chair
 Clive Watson, Senior Independent Non-Executive Director
 Christopher Morgan, Company Secretary

 Tel: +44 (0) 1825 747630
 Email: corporate.enquiries@trifast.com
 (mailto:corporate.enquiries@trifast.com)
 Shareholders: Companysecretariat@trifast.com
 (mailto:Companysecretariat@trifast.com)

 Peel Hunt LLP (Stockbroker & financial adviser)
 Mike Bell
 Tel: +44 (0) 20 7418 8900

 TooleyStreet Communications, (IR & media relations)
 Fiona Tooley
 Tel: +44 (0)7785 703523

 or Email:fiona@tooleystreet.com (mailto:fiona@tooleystreet.com)

 

 

 Editors' notes
 About Trifast plc

 Trifast (TR) is a leading international specialist in the design, engineering,
 manufacture, and distribution of high-quality industrial fastenings and
 Category 'C' components principally to major global assembly industries. We
 supply to c. 5,000 customers in c.75 countries across a wide range of
 industries, including Light vehicle, Heavy vehicle, Health & Home, Energy,
 Tech, and Infrastructure (ET&I), General industrial and Distributors. As a
 full-service provider to multinational OEMs and Tier 1 companies spanning
 several sectors, TR delivers comprehensive support to its customers from
 concept design through to technical engineering consultancy, manufacturing,
 supply management and global logistics. The Group employs c.1,300 people
 across 34 business locations within the UK, Asia, Europe, and the USA
 including seven high-volume, high-quality, and cost-effective manufacturing
 sites and three technical & innovation centres across the world.

 For more information, visit:

 TRIFAST PLC TRI Stock | London Stock Exchange
 (https://www.londonstockexchange.com/stock/TRI/trifast-plc/company-page)

 Our website: www.trifast.com (http://www.trifast.com)

 LinkedIn: www.linkedin.com/company/tr-fastenings
 (http://www.linkedin.com/company/tr-fastenings)

 Twitter: www.twitter.com/trfastenings (http://www.twitter.com/trfastenings)

 Facebook: www.facebook.com/trfastenings (http://www.facebook.com/trfastenings)

 Note

 Trifast, TR and TR Fastenings are registered trademarks of the Company.

 LEI number: 213800WFIVE6RUK3CR22

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.  Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

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